Vindication for Ed Miliband is in the air

David Cameron may now surf the zeitgeist of fairness, but Labour is in a stronger position than it realises

Ed Miliband after his speech to Labour's conference in Liverpool. If an election were held now, a leading psephologist believes Miliband's party would win outright. Photograph: Christoper Thomond/Guardian. for the Guardian Christoper Thomond/Guardian./Guardian

Politics grips its followers but it's not necessarily good for soul, sanity or temper. I'm about to take time out for a couple of months, so it's a good moment to pause and take stock. How do things look? Bleaker than I can remember, with darker economic forecasts, unemployment rising through next year and more cuts through to the bone.

David Cameron whistled in the dark in his Financial Times article yesterday, exhorting: "We must counsel against pessimism." He may see a green shoot on Tuesday for any growth figure above flat – but he needs an impossible 1.3% to reach his own forecasts. Nick Clegg on Monday boasted of a regional growth fund that is only a third the size of the abolished regional development agencies. George Osborne may parade investment plans in his autumn statement but no rethink on austerity is expected, only a cutting of employment rights.

However, Cameron does have a talent for surfing the zeitgeist. Just as he caught the mood in opposition with going green, hugging hoodies and poverty pledges, now he sniffs a change in the prevailing wind. Yesterday he wrote: "For too long the British economy has been characterised by unfairness and imbalance, short-term thinking and short-term gains. Our ambition is to build a new and better economy, where opportunity, wealth and work are spread more widely." He lifted that thought right out of the Ed Miliband conference speech, words that might have come from a speech on the steps of St Paul's. The sentiment heralds no change of policy, but he feels the pulse of the country.

On Monday a group of 100 economists and academics launched Plan B: A Good Economy for a Good Society. Under the auspices of Compass, it proposes a growth in jobs, construction, green development and a tilting of incomes away from the top towards the middle and bottom. Miliband, speaking at a Derbyshire engineering company on Monday, reiterated his call for tax incentives for productive not destructive investment. These ideas take time to percolate, but as the economic news darkens, as banks' profits swell and markets jitter again, Miliband's conference speech will be seen as a marker of the turning tide. Even Cameron senses that new ideas are gaining ground. There are alternatives; deficit reduction is hurting but not working; and pain without gain is the failed road to perdition.

Now Labour needs more urgent passion and anger to shake off the Tories' "Labour to blame" attacks. Worry about the young and anxiety for their debt-ridden, jobless future weigh on most families as household incomes drop. Labour's VAT cut plan looks timely after the Office for National Statistics found that VAT takes more from the poor than the rich.

One of Miliband's strengths is confidence when others get rattled. He feels vindicated on what he has said about "predator" capitalists. Meanwhile, he looks in astonishment at the needless chaos within the NHS. Official figures from the House of Commons library show Cameron has broken his pledge not to cut the health service: spending fell by £800m in real terms as waiting times rise. He looks on in frank amazement at the outbreak of voter-alienating Euro-madness among the Tories.

In an election now, the leading psephologist Professor John Curtice reckons Labour could win outright. After the boundary changes, they would still be the biggest party in a hung parliament, gaining most from the Lib Dem collapse. It worries many in Labour ranks that as yet they have made no inroads into the Tory vote, but even so Curtice still gives Labour the winning edge. To be ahead at all is, he reckons, not bad only 18 months from a car-crash election, and he remarks on Labour's uncharacteristic freedom from serious internal discord.

The party still has to repair its reputation for economic competence, he says, but Cameron has not proved as successful a leader as his early charisma promised. "A bit better than average, but not commanding the attention of a Blair, Thatcher or Wilson. Tories are doing well to hang on, but hanging on is all they are doing." Their prospects are worse if the economy doesn't pick up and voters decide the government is indeed "on the wrong path".

Labour is in a stronger position than many within it quite realise. Apart from the two Eds, others often have a nervous air, lacking an instinct for the jugular or vociferous enough outrage at the injustice being inflicted. Christmas will be hard as many more families see lost jobs. I will be back in January, hoping that Osborne and Cameron will be forced to turn back and go for growth – not in windy words but in deeds.